Foreign portfolio investors (FPIs) have demonstrated strong confidence in the Indian stock market, making a net investment of ₹13,107.54 crore between June 23 and June 27. According to data from the National Securities Depository Limited (NSDL), this inflow signifies a positive shift in investor sentiment towards Indian equities.

The data reveals that FPIs invested heavily in the Indian equity market, particularly on Monday and Friday, suggesting a growing optimism. With these recent inflows, the total net investment by foreign investors in June has reached ₹8,915 crore. This turnaround follows a period of uncertainty influenced by geopolitical tensions.

Easing geopolitical tensions between the U.S., Iran, and Israel have contributed to improved global market sentiment, encouraging foreign investors to view emerging markets like India with greater favor. Furthermore, strong domestic fundamentals are bolstering this renewed interest. The Reserve Bank of India (RBI) recently reduced interest rates by 50 basis points during its Monetary Policy Committee (MPC) meeting, a move expected to stimulate economic growth. Additionally, low inflation within the Indian economy is further strengthening investor confidence. The combination of global stability, supportive policies, and robust macroeconomic indicators is currently positioning India as an appealing destination for foreign investment.

However, it's important to note that not all weeks in June have seen positive FPI inflows. For instance, one week saw FPIs invest ₹3,346.94 crore, boosted by the RBI's rate cut, but this figure was reduced by a significant outflow of ₹3,275.76 crore on the last trading day due to geopolitical tensions. Furthermore, despite inflows during a particular week, the overall FPI investment trend for June remained negative, with a net withdrawal of ₹5,402 crore from Indian equity markets.

Looking ahead, macroeconomic indicators, institutional buying support, and sector-specific triggers such as monsoon progress, consumption trends, and infrastructure development are expected to influence stock-specific movements and FPI behavior in the short term.

In May, net foreign portfolio investment (FPI) inflows were positive, reaching ₹19,860 crore, making it the best-performing month for foreign investment so far this year. In contrast, FPIs sold stocks worth ₹3,973 crore in March and had significant outflows in January and February, with ₹78,027 crore and ₹34,574 crore respectively. These figures highlight the fluctuating nature of FPI flows and their sensitivity to both global and domestic factors.